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The Fight for New Homes

rowofhomesNew home sales experienced a slight dip in July, according to the U.S. Census Bureau’s New Residential Sales report, released on Wednesday. Though sales have been on a steady year-over-year incline since 2012, July 2017 still experienced a 8.9 percent decrease year-over-year, the first year-over-year drop since February 2016, and a 9.4 percent decrease month-over-month. Seasonally adjusted annual rates for new single-family home sales in July was 571,000.

"The third-quarter sales data are starting out significantly below the second-quarter average, and many other housing reports have also shown some recent weakening in their respective trends," Daniel Silver, Economist at JPMorgan in New York, said to Reuters. "Today's report strengthens our conviction that real residential investment will decline in the third quarter."

Also in the report, June’s previous sales rate was revised from 610,000 to 630,000 units. May’s sales were revised as well. However, according to Reuters, many builders are struggling to fill in the gap in housing from the shortage.

"New home sales are still concentrated in the higher end of the market," said Matthew Pointon, Economist at Capital Economics. "Until builders switch their efforts to cheaper starter homes, that will limit the degree to which sales can grow."

Inventory reached new heights in previous months, topping 276,000 units in July, the highest level since June 2009, but overall, inventory is still behind. Moreover, a July survey from Fannie Mae revealed that more consumers believe now is a bad time to buy, but this may change given the currently strong labor market.

To see the full report, click here.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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